U.S. Producer Prices Rose Robustly in November

A gauge of U.S. business prices rose in November, pointing to emerging inflation pressure in the economy.

The producer-price index for final demand, which measures changes in the prices that U.S. companies receive for their goods and services, increased a seasonally adjusted 0.4% in November from a month earlier, the Labor Department said Tuesday. This matched expectations of economists surveyed by The Wall Street Journal.

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A jump in gasoline prices pushed up prices for final demand goods, which accounted for the bulk of the month-over-month rise in business prices.

Producer prices were up 0.4% in November when excluding food and energy and a volatile category known as trade services. From a year earlier, overall producer prices advanced 3.1%, the biggest jump in nearly six years.

Rising oil prices and improved global demand have helped push up the index this year.

Producer prices don't necessarily directly translate into what consumers pay, but in general, PPI readings follow the same trends as other major inflation gauges, which have remained subdued this year.

The Fed's preferred inflation gauge rose 1.6% in October from a year earlier, according to the Commerce Department. That annual inflation reading has remained below the Fed's 2% target for the best part of 5 ½ years.

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Fed officials are likely to raise their benchmark short-term rate Wednesday by a quarter-percentage point to a range between 1.25% and 1.5%, but low inflation readings could complicate officials' decisions on how quickly to raise interest rates in 2018 and beyond.

The Labor Department releases data on the consumer price index Wednesday. Economists expect this key inflation gauge increased 0.4% in November from a month earlier.